How Important Is Pricing When Choosing A Crowdfunding Platform?


Fees Matter Less Than You Might Think

With so many crowdfunding options the search process can quickly make your headspin, especially when it comes to pricing. This guide is to help reveal everything to consider when comparing pricing on crowdfunding sites.

Fundraisers naturally want to keep the most amount of donated money and rightfully focus on the fees as a major part of their decision. Unfortunately, evaluating a crowdfunding platform based solely on price can be deceiving. We’ve seen many people fall into the pricing trap because there isn’t clear information on how to evaluate fees, and often times low isn’t the best way to go. So let’s get to it!

Consideration 1: What Features Do You Need To Reach Your Goal?

A common end goal goes something like: “I want to withdraw the most amount of money I can at the end of my fundraiser.”

Lower fees is only one of the factors that contribute to helping you raise and keep the most money for your fundraiser. Crowdfunding is largely about promoting a story, and better promotional tools can significantly increase the amount of money you raise. When looking at different example campaigns, ask yourself how easy it is to make a donation or share the page on a social network. When you start your own campaign, ask yourself how important page customizations and personalized emails are to your goal. Often times sites with lower fees lack some of the core promotional pieces necessary to tell and share your story.

The bottom line is that stronger promotional features usually lead to more money donated, which in turn nets you more money raised. Here’s an example:


Consideration 2: How Important Is User Experience?

It turns out that user experience is a huge factor in how much money you can raise. For starters, the crowdfunding site needs to be well designed, secure, and help tell your story well. Rich media should be prominent, and visitors to your campaign will expect to see how their money will make a difference.

Pay attention to how easy it is to find the donation button and how frictionless it is to complete a donation. Make sure to investigate what prompts donors are shown after they donate – this plays a huge role in getting your campaign more exposure. Donors feel better when they are personally thanked and updated during the campaign, so we highly recommend sites that incorporate these features into the platform.

It’s now more important than ever to see how your page looks on a mobile phone. In many cases more than half of your visitors will be viewing your page from Facebook or an email on a mobile device and you’ll lose donors instantly if the page isn’t optimized.

Consideration 3: The Fine Print on Pricing & Fees

The one thing all crowdfunding sites have in common is fees that go to support the teams of people that develop and maintain the site.

A crowdfunding platform fee is usually split up into two parts:

  • Payment Processor Fee: Crowdfunding sites generally partner with a payment processor company to give you a great payments experience. Common payment processors include Wepay or Paypal and they specialize in processing your credit cards, keeping your donations secure, and making withdrawing your funds as frictionless as possible. The payment processing company charges a small transaction fee to campaign owner for this service.
  • Crowdfunding Transaction Fee: This platform fee is controlled by the crowdfunding site and may vary based what the platform thinks is fair. This fee covers business expenses such as salaries, rent, utilities and insurance.

The most common platform fees:

$0 Fee/Free. Be careful of sites that market that they don’t have fees. You will still be charged a 3% transaction for the payment processing fee. Instead of charging you for the crowdfunding transaction, these sites will instead automatically add a “suggested donation” (i.e platform fee) to the donation amount. Every donor must then decide to keep, change, or opt-out of this before completing their transaction This creates friction and it’s likely to cause a drop off in donations because of this less than optimal experience.

Goal Oriented Transaction Fees. Some crowdfunding sites will charge a significantly higher fee if the fundraising goal is not met. Even though you keep the money raised, it often comes at a premium. This makes choosing an appropriate goal that much more important. As with the flat fees, calculate a few different scenarios to see if the premium is worth it.

Flat Transaction Fee. Some sites offer a lower transaction but add a flat transaction fee on top of it. It may seem lower but it can actually net you less if the majority of your donations are $20 or less. For example:


Anticipate what your typical donor will give and run the numbers to see which option makes sense.

We Hope Our Guide Helps You Find The Right Crowdfunding Platform For Your Needs

We know the number of crowdfunding options is overwhelming and that pricing is a probably the biggest differentiator when making a decision , so we hope that these details make the process a bit less daunting. If you’re interested in learning about the Fundly approach to crowdfunding, please visit our features and pricing pages to learn more. We understand this can be overwhelming so we’re here to answer any questions you may have.

will Will Chang is Head of Product at Fundly.

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